There is an art to crowdfunding. The daunting yet exhilarating public experiment that can make or break your business venture. But behind the nerves, preparation, and tight deadlines, crowdfunding is an incredibly business-savvy concept; one that in just 1 to 60 days will help you determine:
If there is sufficient demand for your product
How much people are willing to pay for your product
If you will have the capital to support your bottomline and kickstart your production and,
If you’re up to running a business; crowdfunding is a high pressure test – do you have what it takes?
Someone who is very well-versed in crowdfunding is Maria Baker, the founder of the revolutionary women’s snow apparel brand, Nobody’s Princess.
“Without using an external agency or crowdfunding specialist, my startup was solely funded through two rounds of crowdfunding. The first raised $10,000 via Indiegogo, followed by almost $100,000 via Kickstarter”, says Maria. “While the audience was primarily Australia & New Zealand, it reached over 1 million people from all over the world. I achieved this success by problem solving – I did it, and you can, too”.
A big believer of the process and as a twice-successful crowdfunder, Maria shares with us her top 11 lessons to a successful crowdfunding campaign.
11 tips for a successful crowdfunding campaign
1. Is some money ok or is it all or nothing?
When it comes to crowdfunding, you are either fully funded or you’re not funded at all. If your campaign doesn’t reach its monetary target, those who have backed you are refunded their money and you are back to square one. Set a realistic goal that you can achieve in a timely manner. Ask for the bare minimum you need, remembering that the target can be exceeded.
2. Set a deadline and work backwards
Once you have your product or idea ready, announce the campaign six months prior. Leading up to the campaign for too long can work against you. This also extends to how long you want to run your campaign for. Maria says, “I felt 30 days was sufficient given the large funding goal. There was enough time to raise the entire amount without dragging it out too long or losing momentum; And also enough time to assess the situation and pivot, if we needed to”, she continues, “ In the last 48 hours, we raised almost $42,000. It’s not over, until it’s over”.
3. Budgeting for your Crowdfunding
Do your homework. Research all of your costs – manufacturing, shipping, postage, shipping bags, and an online platform for tracking your fulfillment. Are you likely to pay taxes? Do you plan on doing marketing? Looking at an overall figure is always confronting however crowdfunding works as a PR & marketing campaign – on steroids, all while raising capital. Setting a budget early will enable you to set and manage a realistic target which is crucial to your potential success.
Another thing to consider with any crowdfunding platform is fees. Kickstarter has a 5% fee, and payment processing fees (between 3% and 5%) if your campaign is successful. If funding isn’t successful, there are no fees. For example, if you’re looking at raising $100k, be mindful that via Kickstarter you may pay up to $5k in fees. But it depends on the platform.
4. Time is money
Consider how much time and money you’re willing to invest in the venture – especially if going into debt. You will need time to spruik your offer via multiple platforms and be willing to be available to respond to questions and concerns. Being present for your potential buyers is the best way to convert sales.
Spending money on Facebook or Google Ads will help to push the reach/exposure of your campaign, but keep in mind that the world is a talkative place and Facebook communities, Reddit, and forums can be great sources of promotion and traffic. If you have money to spend – video is king, spend it here. People are visual creatures so you’ll need great, high-quality images and infographics, not just good words.
5. Get support. You really can't do it alone
Crowdfunding is like working a 24 hours a day, 30-day shift. Consider who your audience is, and where they are located – are they in different or multiple time zones? Is there someone who can support you with engagement while you get some rest?
Maria reflects on how she invested in external resources to help her with content creation and planning on social media to help relieve some time. In the 3-4 months leading into the campaign, she also gained the support of a local PR agency to help her with a strategy and building a profile.
Support doesn’t need to come professionally. Family & friends can be more helpful than you realize. This is the time to ask for help, and message people individually. Your family & friends want to see you succeed and are already invested in you. Whether they are contributing small or large amounts towards the monetary value of your campaign, sharing and promoting it for you, helping with stock processes… Every support line gives you the confidence to concentrate on what you need to do to succeed.
6. Think B2B and B2C
Are you planning on getting third-party suppliers on board? This is a great opportunity to sell some bulk products while reaching your target. Prepare meetings with potential stockists prior to the campaign and encourage them to purchase during the campaign at a discounted rate using the platform.
Post-campaign is also an incredible sales tool to show interested businesses that may want to invest in you. They need to know that your idea or product is in demand, so the crowdfunding process speaks for itself – deliver the results, and your potential suppliers can’t argue.
7. Fake it until you make it!
There is often a negative connotation around “Imposter Syndrome”, but if you own it – it can positively work in your favor. Have your website, social media, and any other online presence working with genuine interactions before you launch – people love to research and your company/brand/idea will be their prime topic. Building loyalty is important, so establishing that you’ve been around and look like a full-fledged business (even if you’re not quite there, yet) is crucial to earning that trust.
Maria points out, “Only you know how small you [your business] really is when you’re starting up; having a brand is a great way to reinvent yourself in a business sense. Your followers will see what you show them – so show them how grand you are, will, or can be”.
8. Think about fulfilment, updates and post campaigns. The funding is only part of it
Remember, you need to show you are a viable and trustworthy business. Be prepared for the moment when you reach your target; you should already have the systems in place to fulfil the expectations of your backers. This includes research on how you will fulfil your product or service post campaign – do you need an ecommerce platform, shipping account? Do you need warehouse space and help? Provide consistent updates via email and social media – communication is key to give your backers piece-of-mind that they’ll get what they have invested in.
9. Be Human
No one is going to be as passionate about your business, product idea, and crowdfunding journey, as you. Be the face: live and breathe your product. Delegate the ‘behind-the-scenes jobs’ so that you can concentrate on creating conversations.
Your backers want to get to know YOU – not just the product/service. Their faith in what you’re offering only goes as far as their faith in you, so it’s important to get comfortable being in front of a camera, writing authentic updates, and being prepared to share the highs and the lows.
Having a trusting group of backers means when something goes wrong (like delays) they will stick with you because they are emotionally connected to another human being – you.
10. Analytics are everything
Most crowdfunding platforms have great analytics and allow you to create UTM (Unique Tracking Management) web addresses so you can post in different locations and see where your traffic is coming from. Get comfortable with setting up Google Analytics too – you’ll get great insight as to where your traffic is coming from, and you’ll see conversions if you do run ads.
Heatmaps (like Hotjar) help you work out earlier what is and isn’t working on your crowdfunding landing page – making tweaks to your content along the way is crucial – you’ll soon realize what is and isn’t valuable, and where your potential backers are running into pain points. This is also a great tool to use on your website prior to the campaign to help you nut out the nitty gritty details before designing your landing page.
11. More than capital
Lastly, but probably one of the most valuable tips to consider in your decision to pursue crowdfunding is that backers of a successful crowdfunder are an accepted format of “mini investors”. The [Australian] Government (or private businesses] often releases State and National business grants to support small business. Most grants need a ‘matched or equal contribution’ to the amount you are applying for. Capital raised via crowdfunding acts as equal contributions, meaning you’ll be already one step ahead.
View Maria’s Nobody’s Princess Snow Apparel converting Kickstarter page here.